I sincerely doubt this is true.

Ask yourself the following 2 questions, and think about your answers.

1) In the Manufacturer - Retailer - Consumer chain, who stands to lose the most from digital distribution of games?

2) (this kind of answers the first question) Consoles are usually sold at very low margins at retail, because traditionally, retail makes the majority of their money off software sales. If the PSP-3000 is near-cost at $169.99, and the PSP Go lacks a UMD drive, but contains 16GB of SSD memory (which retails around $100, but probably only costs $40-50 to make)..

Lets say the PSP Go costs around $180-$190 to make. Which parts of the chain would benefit the most from a $199.99 pricetag? Which would benefit the most from a $249.99 pricetag? Why?

As a bonus question, ask yourself:

3) Who really sets the price for consoles at retail?  Is it the manufacturer, the retailer... or do they come to an agreement on major items like game consoles?  Remember, the retailer is not forced to buy anything from the manufacturer.  They buy things to sell them, and make profits.  If they can't sell games for profit, then...

that + cookie. At most- it should be as much as a dsi- so a price tag of 170 would make it compete head to head.

I'll still buy the PSPgo but this is interesting because the price is too high for some people...

^Its just high when compared to other models that you can buy which have a slightly bigger screen and can play UMDs and be homebreworized.

$250 is just a bit too much for me. I'll eventually be getting one, though -- the Go has a nice screen, and I really like the portability - my PSP-2000 sort of fits in my camera bag, but it's just a bit too large and hefty for its own good.

what I liked about older psp models was that you could actually hold your games